So CMS Thinks Mr. Jones’ Leg Grew Back, How Do I Tell CMS, it’s Still MIA?

The HAUTE HCC Blog with TMI:  Free HCC Resources and TIPS For 2014 – dedicated to HCC Coding and Risk Adjustment for Medicare Advantage Plans

By Holly Cassano, CPC, AAPC ICD 10CM Certified

CLIFF Notes for HCC Coding – A Three Part Series on Hierarchical Condition Categories (HCCs)

In this installment of “CLIFF Notes for HCC Coding,” I want to focus your attention on achieving compliant HCC Coding success. You will understand how to show CMS that Mr. Jones’ leg is still missing in action, as well as understand “The Key Performance Indicators (KPI’s)” to HCC coding.  This will ultimately lead an MA Plan and it’s providers to overall, success, increase and maintain profits, improve Star Ratings, Reflect accurate RAF Scores and increase HEDIS Measure Compliance.  Similarly, costs will decrease and Plans will be able to provide better benefits to Members and allow for better Premiums Per Member, Per Month (PMPM).

A Fistful of Dollars for Your Thoughts on HCC’s

It’s not every day I can work a Dirty Harry quote into a blog piece, but opportunity presented and I went for it and hopefully, it will “make your day!”  Ok, well you don’t need a 44 Magnum to arm yourself for successful HCC coding, all you need is an open mind and an understanding that HCC codes are “Static” to CMS, not “Dynamic” – that is in the sense of them being an annual pursuit with CMS for reimbursement.

Hierarchal Condition Categories are the primary drivers of the PMPM (per member per month) Premiums paid to a Medicare Advantage plan by CMS.

To better understand Risk Adjustment, you would need to look at a KPI at its core.  That would be HCC payment rational and how it was developed with the mindset of mirroring a Member’s Health Risk Profile (HRP) within a Medicare Advantage Plan and how CMS utilizes ICD-9 CM information as the primary indicator to determine a member’s health status.

The HCC Coding Process:

-          Assessments/Plans/DX Codes Documented In Charts

-          Coding Precision & Specificity

-          Providers reporting minimum of 12 DX Codes to Plan – Provider Ability To Submit Max DX Codes – Use Of 99080* If Necessary(CMS Accepts 12 DX Codes).

-          Plan Sends To RAPs/DX Codes Converted To HCC Codes

-          CMS Factors Plans Risk Adjustment(RAF Scores), Reimbursement

-          Plan Reimbursement allows Plan & Providers To Deliver Better Benefits/Quality care to members

Disease Hierarchy

CMS reimburses MA Plans via the Disease Hierarchy (HCC ) system. This means that if a beneficiary has a Chronic Condition like Type 2 Diabetes, uncomplicated with a Neurological Manifestation, which is HCC  16, it “trumps” Type 2 DM, uncomplicated, which is HCC 19 and is reimbursed at a lesser rate than HCC 16.  It would not be appropriate to report both, because HCC 16 most accurately reflects the Chronic Disease process, which also has an associated manifestation. In other words, payment will always be associated with the HCC that most accurately represents the true disease process in the member and if the MA Plan reports both to CMS, CMS will “drop” the lesser of the two HCC’s reported.

It’s All about “Documentation, Documentation, Documentation”

In Real Estate, the adage is “Location, Location, Location,” well the same principle applies for HCC coding, except the adage is “Documentation, Documentation, Documentation.”  Compliant documentation starts at the “time of service,” or (TOS), otherwise known as the “face-to-face encounter” with the treating provider. Plans utilize the medical record to determine ICD-9-CM codes that map to current Chronic Conditions and HCC codes. The encounter information documented at the TOS,  is submitted by the provider to the MA Plan, who in turn submits the HCC codes to CMS for reimbursement.  Every HCC code must map directly back to a current condition or prescribed medication for a condition/status codes, like “COPD”,  “insulin status” or “Below Knee Amputation”.

A Plan’s payments for patients who are members of the Medicare Advantage Plan are based on the diagnoses/HCC codes submitted for those patients in the previous year.  Under-reporting or non-reporting  of HCC codes will have a significantly negative impact on a Provider’s RAF Score and individual member Risk Scores.

CMS recognizes that MA members have a higher average risk score, providers who do not audit their patients charts at least annually to ensure accurate HCC code capture,  may risk being dropped from a Plan for High MLR’s and Low RAF Scores, as the plan is unable to sustain poorly performing providers with high risk members that have zero HCC codes reported.



-          Monitoring- signs/ symptoms/ disease progression & regression

-          Evaluating- test results/ medication effectiveness/ response to treatment

-          Assessing- ordering tests/ discussion/ review records/ counseling

-          Treating- medications/ therapies/ modalities

It is “Mission Critical” for accurate reporting of chronic conditions, that provider documentation also include “linking statements” for all identified disease manifestations (e.g., “TT2 diabetes with ophthalmic disease manifestations”). If there is no linking statement, then a manifestation code can’t be included in a  members health risk profile.

CMS is crystal clear about quantifying Active Chronic Conditions for Risk Adjustment.  The following list of “Unacceptable Types of Diagnoses (outpatient hospital and physician settings)” reflects that:

-          Rule out Diagnosis/Conditions/Symptoms

-          Probable Diagnosis/Conditions/Symptoms

-          Questionable Diagnosis/Conditions/Symptoms

-          Working Diagnosis/Conditions/Symptoms

-          Suspected Diagnosis/Conditions/Symptoms

CMS is also crystal clear on the subject of “Source Documents” and what is considered acceptable and appropriate to extrapolate data from for Risk Adjustment. The following list is of “Unacceptable Sources of Medical Records and Medical Documentation”:

-          Superbill

-          Problem List

-          Skilled nursing facility (SNF)

-          A diagnostic report that has not been interpreted

-          Alternative data sources (e.g., pharmacy)

-          Unacceptable physician extenders (e.g., nutritionist, dietician)

-          Physician-signed attestation

-          Any documentation for dates of service outside the data collection period

Final thoughts

In the second step to Risk Adjustment success – it is vital for Plans and Coders to have a true understanding of HCC methodologies, so that data extracted can be submitted to CMS accurately for correct payment. Developing a core relationship between the Plan and providers are essential to successful HCC Capture.

“Provider Education Is Key To a Plan’s Success.”

For more information on Risk Adjustment please click on the following link to SCAN Health Plan, a leader in the Risk Adjustment community:



For information on attending Risk Adjustment Seminars for Education, please visit: RISE – the first national association totally dedicated to enabling healthcare professionals to meet the challenges of risk adjustment.


Document Those HCC’s!!!


Holly Cassano, CPC, AAPC ICD 10CM Certified


Director of Coding Education and Compliance for Tactical Management Inc., (TMI)


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